Get Ahead of it Today! SCA – Your Strategic Partner
Written by: Bill Dolan, CMB, AMP
Before you know it, you’ll be reviewing your 3rd Qtr. Call Reports to analyze just where you stand amongst your peers.
The questions every CEO/CFO should be asking themselves today are the following:
Are you prepared for the current environment you find yourself in?
What does your strategic plan look like for the next 12-18 months?
How are you addressing immediate challenges, continued volatility, and long-term growth?
Being in the trenches, each week appears to deliver conflicting indicators about the economy, the effectiveness of bank regulation and supervision, as well as the flexibility of our financial systems. Though these signals may establish uncertainty, there are steps your bank should be taking to mitigate potential risk and exposure.
There is compelling weight within the market today, being driven by higher interest rates, a continued outflow of deposits, slower economic growth and inherent loss within bond portfolios along with worsening credit conditions.
Recently, Moody’s downgraded the ratings of 11 institutions due to deterioration seen in both their operating environments and their funding conditions.
Ask yourself what appropriate measures have you taken or are you taking, to brace yourself for continued market uncertainty with a primary focus on risk governance and adequate liquidity both by market participants and your regulators?
As banks chart their course in navigating the next two quarters into 2024’ what steps will you take to defend your franchise and to strengthen your position through customer/client retention and expense reduction, while strategically reshaping your business portfolio? If not in this position, have you considered asset sales to weather the current environment?
For over 32 years, SCA has combined innovative thinking with unrivaled industry knowledge operating under five business units: Strategic Planning, Compliance & Regulation, Technology, Lending Solutions, and Managed Services which include: Outsourcing, Staffing, and Training. Furthermore, the SCA Mortgage Exchange, an advisory group collaborates with CEO’s, CFOs, and Secondary Market Managers to Buy/Sell specific loan products and pools, to support unique balance sheet needs and bolster CRA requirements to increase liquidity and profitability.
To navigate through these turbulent waters, banks will need to keep their eyes on five key areas:
Risk management and regulations -expect a higher degree of supervisory focus on credit, liquidity, and interest-rate risk.
Commercial real estate – reduced demand and uncertainty of return-to-office work plans play out.
Treasury management - timely reporting and monitoring of liquidity positions to identify further potential bank runs along with liquidity sources for mitigation.
Customer growth and cost transformation – Time to rethink customer retention strategies while managing costs during a period of challenged earnings. Also the time to review and revise your operating model in the areas of people, processes, and technology while creating a personalized digital experience cutting across product silos and business lines to establish advanced value for your customers.
Portfolio optimization and transactions – and finally, during these times of such volatility, you will need to analyze and evaluate your current business portfolio to identify key risk exposures along with any mitigating actions to determine the potential impact on profitability, ROE, and key balance sheet metrics.
It goes without saying that this cycle of volatility will continue to exacerbate in the next coming months. This will test you and your institution’s resilience and not allow you and your team to stand still and wait for circumstances to improve.
SCA’s Chief Strategists are proven industry experts and practitioners who can provide end-to-end solutions that allow our clients the ability to overcome their most challenging issues facing them today.
To arrange a free 30-minute consultation with one or more of SCA’s Strategists, contact Bill Dolan, Director at (617) 694-2617 or email at: Wdolan@scapartnering.com. Visit www.scapartnering.com to learn more about SCA and what we can do for you!
